Date post: | 19-Oct-2014 |
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Real Estate |
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Redfin Home Buying ClassRedfin’s North Orange County Team
August 20, 2014 – Fullerton, CA
Hosts: Jacob Bruce and Kimberly Rehnquist
@Redfinfacebook.com/Redfin
Agenda● Overview of the process● Are you ready to buy?● Understanding the market● Never miss a home● Choosing an agent● Touring● Mortgages● Break!● Short sales & foreclosures● Making an offer● Acceptance to closing
A Little Bit About Who We Are
Redfin is a full service real estate brokerage that has helped over 20,000 people buy or sell a home; 97% would refer us to a friend.
● Customers, not commissions● Informed decisions● Right home for the right price
No obligation Commission credit
Understanding the Buying Process
Are You Ready to Buy?● Do you have a family and need room to grow?● Do you expect to own the home for 5 or more years?● Have you saved up a down payment?● Can you rent for less?
Overview of a Purchase
Research
Neighborhoods
Real Estate Agents
Mortgage Options
Preapproval
Consider your needs
Search
Define Preferences
Saved Search
Home Tours
Open Houses
Offer
Comparables
Draft Offer Docs
Negotiate
Mutual Acceptance
Closing
Earnest Money
Inspection
Loan application
Title Review
Appraisal
Financing Approval
Closing
Understanding the Market
Current Market: More Inventory
Current Market: Rising Prices
Fullerton Overview
Never Miss A Home
Real Estate Sites: What to Look For● Has all the homes for
sale● Updated every 15
minutes● Real-time sales data● Insights from agents● Lots of data● Mobile apps
Never Miss a Home
Redfin On the Go. Mobile Apps● See every new home, just minutes after it's
listed while away from your computer with your smart phone or tablet.
Choosing the Right Agent
What to Ask Any Agent● Is this your full-time job?● Where were your last five deals?● Who else will be working with me?● When am I committed to working with you?● Has a client ever filed a complaint?● How are you paid?● Can I see some reviews of your work?
Redfin Agent Reviews
Seeing Homes in Person
Making the Most of Your Tour1. Bring a camera, notebook & tape
measure2. See how much sunlight the place gets3. Check the bathrooms for rot & mold4. Look for wavy or discolored wood
siding5. Make sure water spouts drain away
from house6. Take stock of storage space7. Turn off any music playing in house8. Check for hardwood floors
9. Peek into the attic10. Bring a marble or two11. When sharing a wall, make sure it’s
thick12. Ignore the appliances and carpets13. Check the closets14. Get the disclosure packet15. Compare the property’s tax records to
the listing details
Slide 20 of 55
How Touring with Redfin Works● Up to six homes per
tour in two hour blocks● Go on as many tours
as you need, we just ask for your pre-approval or proof of funds prior to the 3rd tour.
● Led by agent or associate agent
●No obligation
Mortgages
Local Recommended Lenders
In no way does Redfin
benefit financially
from recommending lenders – we
just think they’re great
lenders!
Review Your Financial Situation● Pull credit report, look for errors. Earlier the better● Establish comfort level for monthly payment● Figure out how much monthly income goes towards
debt: 45% Max Conv, 56.9% Max FHA 43% Max Jumbo, 41% VA
● Pay down credit balances to 1/3rd ● Don’t open any new lines of credit● Don’t buy any big ticket items● Source of money● Current employment status
Get Pre-Approved EarlyA pre-approval letter is a letter from a bank or a lender estimating how much they'll lend you (May vary from what you want to pay monthly)
● Establishes what you can afford & makes offer process go faster
● Redfin asks that you get pre-approved before your third tour
● Good for 90 days, depending on lender (Credit reports are good for 90 days)
Info needed:
● W-2’s, 2 years tax returns (with all schedules, K-1’s etc) 1 month of pay-stubs, asset statements (Show all funds used to close loan) Drivers License, If you own a home or homes, need mortgage, tax, and insurance information
Pulling Credit: Is it harmful?
● Your credit report must be reviewed by a lender before you can obtain a pre-approval
● If you know your score, a lender should be able to give you ballpark pricing for their loan products
● Don’t allow lots of lenders topull your credit score repeatedly
● Pull a free credit report. One of the best is www.annualcreditreport.com
Closing Costs● Lender fees – Typically $1000-$1750● Appraisal – Typically $425 - $500 Add $150 for rental property – 2 appraisals for over 1MMTitle and Escrow are usually about $2 per $1000 plus $300
► Sample $300,000 would be $600 + $300 = $900 Then another $300 or so in third party fees (Notary, Recording, etc)
Taxes – Typically 1.2% of the sales price. Sample 500K price$500,000*1.2% = $6000/12= $500/MonthCollect 6-9 months taxes and one year of insurance at closing for impound accounts.
1 Month in Interest Rates
1 Year Look at Rates
Non Traditional Loan Programs!!!If you are self employed or have a unique income situation, ask
your lender about special programs that can help you qualify.
At Banc of California – Banc Home Loans we offer loans that turn bank deposits into income for qualifying purposes.
We also offer stated income loans to people with high net worth. 30% down and assets of 1MM in reserves. Loans up to 3.5MM
Lastly offer loans to people that Short Sold or Foreclosed 1 day after the event, provided they have 20% down and a 660 credit score. For people that tried to work with bank and didn’t have a hardship but needed out.
REX program for Equity Sharing http://rexhomebuyer.com
Break!Jacob BruceNorth Orange County
Kimberly RehnquistNorth Orange County
10-Minute Break● Feel free to come ask us questions!
10 mins 5 mins End
Let’s Get Started!
Short Sales and Bank Owned
What is a Short Sale?The owner owes more on the mortgage than the home is worth or will sell for● Usually pre-foreclosure, but not always (divorce, hardship)● Listed for less than what’s owed to the bank● Requires 1 - 2 banks’ approval, sometimes more (usually 2)● May have other liens (taxes, utilities, HOA, mechanics)
We Can Help With a Short Sale!● See short sales with a Redfin Agent● If you want to buy, work with a Redfin Agent or a short sale
partner agent ● Redfin partner agents work for other brokerages but share
Redfin’s commitment to customer service● Get a 15% commission refund
What is a Bank-Owned Property(REO)? ● A foreclosed home owned by a bank or lender● Standard sale but:
► Verbal negotiations► Long response times► Repairs unlikely► Legal addenda may require an attorney► Limited or no disclosures► Banks demand use of their own contracts► Bank can back out any time until they’ve signed
contract► Earnest money deposit usually held by listing
agent
Making an Offer
Crafting Your Offer● Evaluate – your agent will provide you with
information about market conditions and recent sales in the area
● Consider the situation – the seller’s preferences, days on the market, and other interest will influence the process.
● Decide on price & strategy with your agent● Common contingencies & terms:
► Earnest Money► Inspection► Financing► Appraisal► Title Review
Tips for Winning a Bidding War1. Just win, baby! Simply have the best offer.
► Cash is King► Escalate your price? ► Tighten your timelines► Remove some contingencies?
2. Get pre-approved with a local lender3. What’s important to the seller?4. Write a letter & appeal to the seller
► Try and make a personal connection
ESCROW
Your Offer has been Accepted!
● Earnest money deposit – usually 1-3%+● Inspection – approximately $500● Other Inspections – sewer scope, roof, electrical,
geological etc.● Loan Application – 5 days or less● Review Title● Order Appraisal – approximately $500● Loan Approval – remove contingencies!● Escrow – appointment to sign loan documents● Walk through/ Verification of Property● Loan funds, title records, escrow closes● Receive your keys!
Home InspectionWe recommend that you have a home inspection● Cost runs $350 to $1,200 depending upon the
home’s size● Your agent will accompany you● Your time to evaluate the property, bring notepad,
ask questions. Get to know the property and know what your buying
Let’s talk about:● What an inspection contingency covers and doesn’t
cover● Types of inspections
What are Contingencies?Standard timeline for contingencies in local market: 17
days ● Inspection ● Appraisal – Performed in conjunction with financing● Financing● Disclosures
What is Escrow?
Escrow is a neutral third party intermediary that represents neither the buyer nor the seller.
What do they do?• Hold the earnest money• Arrange for payoff of any liens (seller’s mortgage,
utilities, etc.)• Coordinate the signing appointments for all parties• Receive and disburse funds for closing• Arrange to notify county offices to change ownership
Walk Through to Closing
Walk through/Verification of Property: 2-5 days prior to close date. Not a contingency in the contract.Escrow: sign loan documents, transfer funds for your
down payment and closing costs. Lender: Reviews your documents, sets up loan to fundTitle: Title records the day after funding in LA County.
In Orange County title can record on the same day as funding. Give you Keys!!!
So What Now? ● Make sure it’s the right time for you● Check out our Home Buying Guide● Find the right agent● Look for a local lender and get pre-approved● Start seeing homes in person● Make an offer & close the deal
Future Events!
All Done!
Thanks for Coming!Questions? Get in touch:
Jacob Bruce [email protected] [email protected]
Check out our upcoming classes: http://www.redfin.com/events